New Jersey Equal Pay Data Reporting Forms Released

New Jersey’s comprehensive new equal pay law, the Diane B. Allen Equal Pay Act (the “Act”), took effect last month. The law amends the New Jersey Law Against Discrimination (“NJLAD”) by making it a prohibited employment practice for an employer to compensate an employee who is a member of a “protected class” less than the amount paid to employees who are not members of that protected class for “substantially similar work, when viewed as a composite of skill, effort, and responsibility.” Employers can prove a compensation differential is lawful by showing it is due to a seniority system, merit system, or by satisfying several factors including that the differential is based on legitimate, bona fide factors other than the employee’s membership in a protected class, and that the factors supporting the differential are job-related and based on a legitimate business necessity. The Act extends the NJLAD’s two-year statute of limitations to a six-year statute of limitations for wage discrimination claims.

The Act also imposes pay reporting requirements on employers that contract with a public body to provide “public work” or other “qualifying services.” The New Jersey Department of Labor and Workforce Development recently released mandatory reporting forms to monitor and enforce the reporting requirements. These include the Payroll Certification for Public Works Projects, the Annual Equal Pay Report for Qualifying Services Other than Public Works Projects, and instructions for both forms.

The Payroll Certification for Public Works Projects is applicable to employers contracting with the state or any state agency to provide “public work.” Public work is defined as “construction, reconstruction, demolition, alteration, custom fabrication, or repair work, or maintenance work, including painting and decorating,” where such work is “done under contract and paid for in whole or in part out of the funds of a public body, except work performed under a rehabilitation program.” Public work also includes work that is not paid from public funds, if, at the time the parties entered the contract, “the property or premises is owned by the public body or: (a) [n]ot less than 55% of the property or premises is leased by a public body, or is subject to an agreement to be subsequently leased by the public body; and (b) [t]he portion of the property or premises that is leased or subject to an agreement to be subsequently leased by the public body measures more than 20,000 square feet.” All employers performing public work are required to submit the Payroll Certification for Public Works Projects on a weekly basis. The form’s requirements are similar to those already imposed under the Prevailing Wage Act (“PWA”), and uses the same job categories as the PWA, with additional data required for each employee.

The Annual Equal Pay Report for Qualifying Services Other than Public Works Projects is applicable to employers contracting with the state or any state agency to provide “qualifying services” other than public works.  Qualifying services are defined as “the provision of any service to the State or to any other public body, except for public work.” All employers performing qualifying services are required to submit the Annual Equal Pay Report for Qualifying Services Other than Public Works Projects on an annual basis, no later than March 31 of the year following the reporting year. Employers are permitted to use payroll data from any pay period from October through December of the preceding year. The form requires employers to disclose pay information and other data for employees, and to sort employees into one of the following job categories: Executive/Senior Level Officials and Managers, First/Mid Level Officials and Managers, Professionals, Technicians, Sales Workers, Administrative Support Workers, Craft Workers, Operatives, Laborers and Helpers, and Service Workers. A description of each of these categories can be found in the instructions.

Each of the forms collects information regarding employees’ pay and job classification, as well as employees’ sex, race, and ethnicity. The Department advises that “[v]oluntary self-identification is the preferred method of identifying an employee’s sex, race, and ethnicity” and that employers must give employees an opportunity to self-identify. If an employee declines to self-identify, employers must use “observer identification.” The Department of Labor allows the designation, “non-binary,” for employees who do not identify as either male or female. Employers should use caution when soliciting this information from employees, and when conducting observer identifications where necessary. The Department of Labor provides a suggested statement regarding the voluntary nature of self-identification in the form instructions.

For both forms, “multi-establishment” employers must submit a report covering the principal office, as well as a separate report for each office employing 50 or more employees, and a consolidated report for each office employing 50 or fewer employees. Additionally, the forms require that employers disclose the number of hours worked by each employee. For non-exempt employees, employers must report the actual number of hours worked. For exempt employees, employers may report 40 hours per week for full-time employees, or 20 hours per week for part-time employees. Finally, employers filing the Annual Equal Pay Report for Qualifying Services Other than Public Works Projects must sort employees into one of twelve “pay bands” as detailed in 81 F.R. 45479.

We refer all employers to our prior blog regarding this new law for additional background beyond that applicable to employers with public contracts.

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